In Xero, the Statement of Cash Flows is a financial report that provides a summary of your business’s cash inflows and outflows over a specific period. It helps you understand how cash is generated and used in your business operations, investing activities, and financing activities. The Statement of Cash Flows is an essential tool for assessing your company’s liquidity and financial health.
Here’s how to generate a Statement of Cash Flows in Xero:
1. Log in to Xero:
- Access your Xero account using your login credentials.
2. Navigate to Reports:
- From the Xero dashboard, click on the “Reports” tab in the main menu.
3. Select “Statement of Cash Flows”:
- In the Reports section, scroll down to the “Financial Statements” category.
- Click on “Statement of Cash Flows” to generate the report.
4. Choose the Reporting Period:
- Specify the reporting period for which you want to generate the Statement of Cash Flows. You can typically select options like “Last Month,” “Last Quarter,” “This Year,” or customize the date range.
5. Generate the Report:
- After selecting the reporting period, click the “Update” or “Generate” button to create the Statement of Cash Flows.
6. Review the Report:
- Once the report is generated, you’ll see a summary of your cash flow activities categorized into three main sections:
- Operating Activities: This section includes cash flows from your day-to-day business operations, such as sales, expenses, and taxes.
- Investing Activities: Here, you’ll find information on cash flows related to the buying and selling of assets, investments, and loans.
- Financing Activities: This section outlines cash flows associated with financing your business, including loans, equity contributions, and dividend payments.
7. Export and Save (Optional):
- If you want to save or share the report, you can export it in various formats, such as PDF or Excel.
8. Analyze and Interpret:
- Use the Statement of Cash Flows to analyze your business’s cash flow patterns. Pay attention to positive and negative cash flows and their impact on your liquidity.
9. Take Action:
- Based on your analysis, make informed financial decisions. For example, if you see a consistent negative cash flow from operating activities, you may need to implement strategies to improve cash flow, such as managing accounts receivable or reducing expenses.
10. Save the Report for Future Reference:
- You can save the Statement of Cash Flows for future reference or include it in your financial reporting to stakeholders, such as investors or lenders.
The Statement of Cash Flows in Xero provides essential insights into your business’s financial health by focusing on actual cash movements rather than accrual-based accounting. It helps you track and manage your cash flow, plan for future expenses, and make strategic financial decisions.
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